Judge Won’t Restore Charges Over Corporate Campaign Giving

By Tom Schoenberg -
Jun 7, 2011

A federal judge let stand his
decision to throw out part of an indictment against two
fundraisers for Hillary Clinton’s campaigns, saying a ban on
direct corporate donations to federal candidates is
unconstitutional.

U.S. District Judge James Cacheris in Alexandria, Virginia,
today reaffirmed his May 26 ruling that the Supreme Court’s
Citizens United decision in 2010, which gave corporations the
same rights as individuals to spend money independently to
support candidates, means they can make direct campaign
donations that comply with general legal limits. This year,
individuals can give $2,500 to a candidate per election.

“For better or worse, Citizens United held that the First
Amendment treats corporations and individuals equally for
purposes of political speech,” Cacheris wrote. “This leaves no
logical room for an individual to be able to donate $2,500 to a
campaign while a corporation like Galen cannot donate a cent.”

The judge’s decision came in a case against fundraisers for
Clinton’s 2008 presidential campaign who were indicted for
improperly reimbursing $186,600 to donors. Cacheris threw out
the charge that they illegally funneled money from Galen Capital
Group LLC to the campaign.

Peter Carr, a spokesman for U.S. Attorney Neil MacBride in
Alexandria, said Justice Department lawyers are reviewing the
ruling and considering their options.

Request to Reconsider

Prosecutors asked Cacheris last week to reconsider his
decision, saying the government failed to cite a campaign
finance ruling critical to the case.

Assistant U.S. Attorney Richard Pilger said in court on
June 3 that the 2003 Supreme Court ruling in FEC v. Beaumont
upheld a ban on corporations contributing directly to
candidates. The Citizens United case involved corporate
expenditures, not contributions, he said.

Cacheris said today he wasn’t bound by the Beaumont
decision because it involved a nonprofit company, not a for-
profit company like Galen. The discrepancy leaves him with “two
persuasive decisions, one more recent than the other,” he said.

The Supreme Court in 1976 said limits on direct
contributions to candidates are constitutional as a means to
prevent corruption. The court reaffirmed that position in
Citizens United.

Cacheris said the high court in 1976 implicitly concluded
that any contributions under the limit “do not create a risk of
quid pro quo corruption or its appearance.”

Senate Campaign Too

In the indictment, which covers Clinton’s 2006 Senate run
as well, the government also charged William P. Danielczyk Jr.,
chairman of McLean, Virginia-based Galen Capital, and Eugene R.
Biagi, its secretary and treasurer, with conspiracy, obstruction
of justice and causing false statements. A trial is to begin
July 6, according to court papers.

Bans on direct corporate donations to candidates go back to
the Tillman Act of 1905. The 2002 campaign finance law
prohibited contributions known as “soft money” from corporate
and union treasuries to the political parties.

The case is U.S. v. Danielczyk, 1:11-cr-00085, U.S.
District Court, Eastern District of Virginia (Alexandria).